Justia Labor & Employment Law Opinion Summaries

Plaintiff was 43 years old when she began working for Defendants. She worked for approximately 15 years before retiring at age 58 due to rheumatoid arthritis. In 2000, Plaintiff successfully applied for disability retirement. Years later, Plaintiff brought a putative class action lawsuit, alleging that Defendants discriminate on the basis of age in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, 12900) by providing reduced disability retirement benefits to older employees who took disability retirement after working for the City for less than 22.22 years. Plaintiff alleged that she became aware her retirement benefits were based on her age after seeing an advertisement on or about July 20, 2017, more than 17 years after her retirement. The court dismissed on the ground that Plaintiff did not file a complaint with the Department of Fair Employment and Housing within one year of the date the alleged unlawful employment practice occurred. The court of appeal reversed. The disparate treatment and disparate impact claims were timely with respect to the allegedly discriminatory disability retirement payments that Plaintiff received within one year of the date on which she filed her DFEH complaint. View "Carroll v. City and County of San Francisco" on Justia Law

O’Grady, a banquet server and bartender at Defendant’s San Francisco ballroom, brought a putative class action, challenging Defendant’s practice of automatically imposing a 21 percent “service charge” to every food and beverage banquet bill. Plaintiff claims part of the money collected as service charges is kept by Defendant, with the rest distributed to “managers and other non-service employees.” Plaintiff alleged that the service charge constituted a gratuity and that Defendant “failed to distribute the total proceeds of [these] gratuities to non-managerial banquet service employees” as required by Labor Code section 351, enforceable under the California Unfair Competition Law, Cal. Bus. & Prof. Code 17200. Plaintiff argued that It is typical in the hospitality industry that establishments impose gratuity charges in the range of 18- 22% of the food and beverage bill, so customers paying these charges reasonably believed they were gratuities to be paid to the service staff. The complaint also alleged “Intentional Interference with Advantageous Relations” and breach of implied contract. The court of appeal reversed the dismissal of the complaint. There is no categorical prohibition why what is called a service charge cannot also meet the statutory definition of a gratuity. Labor Code provisions concerning compensation and working conditions are to be liberally construed in favor of employees. View "O'Grady v. Merchant Exchange Productions, Inc." on Justia Law

TWC operated a Walnut Creek Toyota dealership. The Davises sought employment at TWC, to run its special finance department. The Davises are African-American, and Donald Davis is over the age of 40. The Davises were required to sign agreements providing that the Davises agreed to arbitration. The three agreements are all different. After the Davises became employed, TWC hired a new General Manager, Colon. The Davises claim that Colon “began to systematically undermine [the Davises’s] programs,” an effort “punctuated by shockingly inappropriate ageist and racist comments to and about them.” The Davises eventually resigned, filed complaints with the Department of Fair Employment and Housing, and obtained right to sue letters. The defendants filed an unsuccessful petition to compel arbitration. The court found there was an agreement to arbitrate, but found both procedural and substantive unconscionability. The court of appeal affirmed, noting TWC’s “lack of candor” concerning the agreements. The court noted the “take it or leave it” pressure under which the agreements were signed, the inconsistency between the agreements, how hard it would be for a layman to read the agreements, and the inclusion of broad provisions in violation of public policy. View "Davis v. TWC Dealer Group, Inc." on Justia Law

School bus driver Colleen Knowles sought workers' compensation from her employer, Mountain Empire Unified School District (the District). The District was a self-insured employer under the workers' compensation scheme, and its workers' compensation claims were administered through the San Diego County Schools Risk Management Joint Powers Authority (JPA). JPA purchased excess workers' compensation insurance to cover claims exceeding a set retention. The District was an additional insured under those policies. When a dispute over compensation arose, Knowles and the District petitioned the Workers' Compensation Appeals Board (WCAB). An administrative law judge ultimately approved their stipulation that Knowles suffered a "specific" injury in 2003. The distinction between a "cumulative" and a "specific" injury was pertinent for determining which of JPA's excess insurance policies was triggered. As JPA's excess insurer during the stipulated injury date, Kemper Insurance Company (Kemper) indemnified JPA until it went insolvent. JPA then approached California Insurance Guarantee Association (CIGA), a statutorily created insolvency insurer of last resort, to make up what Kemper had failed to pay. CIGA was only obligated to pay "covered claims," defined to exclude claims for which other insurance was available. On this basis CIGA denied coverage, claiming Knowles suffered a cumulative injury, which meant that JPA might recover from a different excess insurer (other than Kemper). CIGA sued JPA and the District (collectively, defendants) for declaratory relief, asserting that because Knowles suffered a cumulative injury, JPA's claim was not a "covered claim." In their cross-complaint, defendants sought reimbursement from CIGA of benefit payments made to Knowles after Kemper went insolvent. The Court of Appeal concluded that based on the purpose of excess insurance, the superior court had jurisdiction to characterize Knowles's injury in this action differently than was reflected in the WCAB stipulation. The Court reversed the judgment and directed the trial court to enter a new order denying defendants' JPA and the District's motions for summary judgment. View "Cal. Ins. Guarantee Assn. v. San Diego County Schools etc." on Justia Law

McCormick, working as a Lake County appraiser, developed medical symptoms, including pain, fatigue, and dizziness, that seemed to be caused by her office environment. After her employer denied her request to work in a different location, she applied for disability retirement. Adopting the decision of an administrative law judge, the Board of Administration of the California Public Employees’ Retirement System (CalPERS) denied her application on the basis that her condition did not prevent her from performing her job duties at a theoretical different location. The trial court denied relief. The court of appeal reversed. Employees are eligible for CalPERS disability retirement under Government Code section 21156 when, due to a disability, they can no longer perform their usual duties at the only location where their employer will allow them to work, even if they might be able to perform those duties at a theoretical different location. Her usual duties required McCormick to work in the Lakeport courthouse, and whether she could have performed her duties elsewhere is irrelevant to her eligibility for disability retirement under section 21156. View "McCormick v. California Public Employees' Retirement System" on Justia Law

U.S. Continental Marketing Inc. (USCM), a manufacturing company that made shoe care products, relied on temporary employees for much of its workforce and contracts for employees' services with Ameritemps, Inc. Elvia Velasco Jimenez worked for USCM as either a direct or temporary employee for five years before her employment was terminated. At that point, she was performing a supervisory role as a line lead in USCM's production department, overseeing as many as thirty colleagues, including both temporary and direct employees of USCM. Jimenez's supervisor was a direct USCM employee. Jimenez asserted claims under the Fair Employment and Housing Act (FEHA) against USCM. Jimenez's claims required a threshold showing that USCM was her employer. Disputing that assertion at trial, USCM framed the inquiry as a contest of relative influence between the direct and contracting employers, asking the jury during closing arguments, "Did [USCM] have control over plaintiff more than the temp agency?" The jury agreed with USCM and returned a special verdict finding that USCM was not Jimenez's employer. Jimenez moved for a new trial, unsuccessfully, and judgment was entered in favor of USCM. On appeal, Jimenez argued there was insufficient evidence to support the special verdict finding and asked the Court of Appeal to reverse the judgment. The Court determined the undisputed evidence demonstrated USCM exercised considerable direction and control over Jimenez under the terms, conditions, and privileges of her employment. And although the parties contested the characterization of Jimenez's termination, the appropriate inquiry in the temporary-staffing context was whether the contracting employer terminated the employee's services for the contracting employer (which USCM did), not whether the contracting employer terminated her employment with her direct employer (which USCM did not do). Accordingly, without expressing any opinion as to the ultimate merit of Jimenez's claims, the Court reversed judgment as to three claims and. The matter was remanded for a new trial at which the jury should be instructed that USCM was Jimenez's employer. View "Jimenez v. U.S. Continental Marketing, Inc." on Justia Law

Ron Koenig was the superintendent and principal of the Warner Unified School District (the district). He and the district entered an agreement to terminate his employment one year before his employment agreement was due to expire. Under the termination agreement, Koenig agreed to release any potential claims against the district in exchange for a lump sum payment equivalent to the amount due during the balance of the term of his employment agreement, consistent with Government Code section 53260. The district also agreed to continue to pay health benefits for Koenig and his spouse "until Koenig reaches age 65 or until Medicare or similar government provided insurance coverage takes effect, whichever occurs first." The district stopped paying Koenig's health benefits 22 months later. Koenig then sued to rescind the termination agreement and sought declaratory relief he was entitled to continued benefits pursuant to his underlying employment agreement, which provided that Koenig and his spouse would continue receiving health benefits, even after the term of the agreement expired. After a bench trial, the trial court determined the district's promise in the termination agreement to pay health benefits until Koenig turned 65 violated section 53261, was unenforceable, and rendered the termination agreement void for lack of consideration. Both Koenig and the district appealed the judgment entered after trial. Koenig contended the trial court properly determined the termination agreement was void but should have concluded he was entitled to continued health benefits until the age of 65. The district contended the trial court erred when it concluded the termination agreement was void; rather, the trial court should have severed the termination agreement's unenforceable promise to continue paying benefits, enforced the remainder of the termination agreement, and required Koenig to pay restitution for benefits paid beyond the term of the original agreement. The Court of Appeal concluded the termination agreement's unlawful promise to pay health benefits in excess of the statutory maximum should have been severed to comply with sections 53260 and 53261, Koenig did not establish he was entitled to rescind the termination agreement, and the district was entitled to restitution for health benefits paid beyond the statutory maximum. Judgment was reversed and the trial court directed to enter judgment in favor of the district for $16,607. View "Koenig v. Warner Unified School District" on Justia Law

Plaintiff, on behalf of herself and three alleged classes of hourly Loews employees, filed suit alleging that Loews improperly calculated her premium payment when Loews failed to provide her with statutorily required meal and/or rest breaks, in violation of Labor Code section 226.7, and Loews underpaid her by unlawfully shaving or rounding time from the hours she worked. The Court of Appeal held that the statute's plain language, statutory history, and federal case precedent differentiates "regular rate of compensation" from "regular rate of pay." The court also held that Loew's facially neutral rounding policy did not systematically undercompensate its employees over time. Therefore, there was no triable issue of material fact and Loews was entitled to judgment as a matter of law. View "Ferra v. Loews Hollywood Hotel, LLC" on Justia Law

Plaintiff filed a putative class action against SGT, alleging that SGT violated various provisions of the Labor Code and Industrial Welfare Commission's (IWC) wage orders by misclassifying drivers as independent contractors. While this appeal was pending, the California Supreme Court decided Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, in which it adopted the "ABC test" used in other jurisdictions to streamline and provide consistency in analyzing the distinction between employees and independent contractors for purposes of wage order claims. The Court of Appeal held that the the ABC test adopted in Dynamex is retroactively applicable to pending litigation on wage and hour claims; the ABC test applies with equal force to Labor Code claims that seek to enforce the fundamental protections afforded by wage order provisions; and statutory claims alleging misclassification not directly premised on wage order protections, and which do not fall within the generic category of "wage and hour laws," are appropriately analyzed under what has commonly been known as the Borello test. Accordingly, the court reversed and remanded. View "Gonzales v. San Gabriel Transit" on Justia Law

Danville, a third-party service station operator, fired Henderson following an accusation of sexual harassment. Henderson managed several of Danville’s Shell-branded gas stations but was never directly employed by Shell. Shell supplied the stations with fuel products and set fuel prices. Danville facilitated the collection of customer payments. Shell compensated Danville for this service and reimbursed Danville for certain expenses. Danville agreed to abide by certain standards to protect the Shell brand. Danville alone made decisions with respect to recruiting, interviewing, hiring, disciplining, promoting and terminating its employees; had sole control over employee payroll functions; and had its own employee handbook. Shell retained the right to ask Danville to “remove” an employee from a Shell-owned station “for good cause shown.” Henderson was instructed to contact Danville for any questions about operating his stations. Shell was not involved in the decision to terminate Henderson’s employment. After his termination, Henderson sued for unpaid wages, statutory wage and record-keeping penalties and interest, plus restitution, injunctive, and declaratory relief under Business and Professions Code section 17200, alleging that Shell was liable as his “joint employer.” The court of appeal affirmed judgment in favor of Shell. Henderson did not present any triable issues of fact demonstrating the existence of a joint employment relationship under the three alternative definitions of employment set forth in Industrial Welfare Commission Wage Order No. 7. View "Henderson v. Equilon Enterprises, LLC" on Justia Law